Guided by President Xi Jinping's key speech about energy revolution-"Four Revolutions and One Cooperation"-the Chinese oil and gas industry continued to accelerate its pace of reform in 2016. China has deepened its supply-side structural reforms, prevented and resolved the problem of excess production capacity, increased the effective supply of clean energy such as natural gas, and formed an energy innovation system. It has pushed forward the reform of pricing mechanisms with significant adjustments in the pricing mechanisms of oil products, pipeline transportation, gas storage and gas used for fertilizer production. It has also accelerated market access reform and encouraged various investors to enter into the fields of exploration & production, pipeline transportation and crude oil imports. China has sped up the legislative process of environmental protection to promote green and low-carbon development. It has accelerated oil & gas industry institutional reform, with some provinces initiating the pilot reform of oil and gas.

In order to promote the supply-side structural reform of energy and to improve the quality of the atmospheric environment, the domestic energy industry is vigorously promoting "coal to gas" projects. While the state government is introducing a series of policies, including environmental protection policies, local governments are also play an active role in introducing relevant policies to promote "coal to gas." Currently, there are two main problems confronting the implementation of the "coal to gas" policy:The first is determining how to ensure a gas supply, and the second is that the price of natural gas is much higher than that of coal and has held back the progress of "coal to gas." In terms of future policies and market trends, it is believed that the state will tighten tax laws as well as emission standards, and the use of coal in power generation, the fuel industry, the chemical industry, and other areas will decrease while the demand for natural gas will continue to increase.

Ultra-deep formations hold abundant oil and gas resources. As the demand for oil and gas increases with economic development, more and more efforts are putting into the exploration and development of oil and gas reservoirs in deep formations around the world. In China, the exploration and development of deep oil and gas are pacing up, especially in ultra-deep formations in the Sichuan Basin, Tarim Basin and Ordos Basin. The reservoirs in these basins feature extremely large depth (over 7000 m), super high temperature (150℃-210℃), super high pressure (over 150 MPa), high acid gas content (H₂S and CO₂), strong heterogeneity, and multiple pressure systems, which pose a series of challenges to wellbore engineering technologies including drilling, drilling fluid, cementing, logging, and completion testing. Therefore, it is necessary to delve into core drilling and testing technologies for deep formations.

The evolution history of energy utilization around the world shows that a clean and low-carbon utilization of energy is the inevitable approach for dealing with climate change and for constructing a harmonious ecosystem. This paper focuses on the strategy options in China's energy-mix transition period based on an analysis of the global energy development trend. It is proved that using clean energy forms is critical to the realization of an energy transition in the country. As a result, natural gas is a practical choice, and structural reforms may help to bring its potential into full play.

In 2016, China's net imports of crude oil increased to 378.3 million tons and its net exports of product oil soared to 20.45 million tons. Refinery crude runs continue to grow at a low rate, and the domestic product oil market still has a supply surplus. Diesel consumption fell for the first time in 21 years. The liquefied petroleum gas (LPG) market continues to grow rapidly, spurred on by feedstock demand for chemicals and gasoline blending components, and imports of LPG have reached a record high of 16.12 million tons. The refinery throughput of PetroChina and SINOPEC had declined for 2 consecutive years, but crude oil imports climbed to a new high of 381 million tons as independent refineries boosted their utilization of capacity and the domestic oilfields produced a decreased amount of output. Imported oil now accounts for more than (2)/(3) of the Chinese market compared to being only about (2)/(3) 15 years ago. Moreover, the proportion of imported crude in refinery runs has risen to 70%. In 2017, China's economy will continue to face substantial pressure, and domestic demand for product oil will continue to grow slowly.

Since July 2014, when the international oil price slumped, the upstream sector of global oil and gas industry has experienced a tough transformation phase lasting over two years. In terms of the development trend, the global upstream sector has demonstrated six characteristics since 2017:firstly, global upstream investment will probably demonstrate the trend of "touching the ground and rising again"; secondly, upstream operating costs will continually decline; thirdly, more favorable finance and taxation clauses will be offered for some resources to be developed through foreign cooperation; fourthly, global oil and gas output will probably further increase; fifthly, upstream exploration efficiency is anticipated to steadily increase; and sixthly, upstream geological understandings, theory and technology will continue to advance. In accordance with the above-mentioned development trends, Chinese oil enterprises must be prepared in four aspects for future rejuvenation. Firstly, persistent upstream investment has to be guaranteed, particularly in the exploration field; secondly, upstream operation efficiency must be promoted through the enhancement of technical research; thirdly, overseas upstream property must be purchased within the "time window"; and fourthly, reforms have to be carried out to realize transformation in the petroleum industry.

The paper analyzed the development and features of China's oil companies' overseas business in 2016. Despite the plummeting crude price and a weak global economy, these companies managed to do well in foreign countries. They steadily increased their shares of oil and gas in overseas oil and gas projects with their distinctive and unique ways:the three state-owned oil companies had focused on the countries involved in the One-BeltOne-Road Initiative, and others had been stressed more on international cooperation in a broader sense and areas. The small-and middle-scale companies had been matured and grew during the process. The central and local governments also played indispensable roles by providing need support for the cooperations.